I have a populist piece in The Tyee this morning on how last week’s paltry $0.20 minimum wage increase in British Columbia actually reflects stagnant wages across the economy and why the Fight for 15 is everyone’s fight. Here it is in full.
Last week, the B.C. government reacted to the increasing push for a higher minimum wage… by giving minimum wage workers a 20 cent raise. Even Business in Vancouver magazine quoted UBC labour economist David Green calling the new higher wage “laughably low.” What perhaps hasn’t received enough attention is that the two-dime bump in the minimum wage — the first in three years — is not that far out of line with stagnant wages across the economy. For instance, the average wage in British Columbia grew by 14 cents in 2014! While 20 cents over three years doesn’t even allow minimum wage earners to account for inflation, the fact is most of us have been barely keeping up with price increases. Real wages, those adjusted for inflation, have been mostly stagnant.
While Canada-wide statistics paint a picture of modest wage growth since the end of the last recession in June 2009, much of this growth is due to the three oil boom provinces, Alberta, Saskatchewan and Newfoundland and Labrador. In fact, for the more than 80 per cent of workers outside the oil boom provinces, average real wages have grown just two per cent since that period. Median wages, which are not dragged upwards by the disproportionately large increases in wages for the wealthy, have seen just 0.4 per cent growth outside the oil provinces. This is stagnation loud and clear (see this earlier post for a closer look at the numbers).
Here’s a few more notes on a point that seems to be made with increasing frequency: working for a wage has always been precarious. The current focus on precarity as a defining feature of our age is not unwelcome; indeed, its popularity shows that it clearly harmonizes with the everyday experience of many. The question is whether that everyday experience is so new; can a focus on precarity as novelty be crowding out important features of the transformations we’re seeing and what we can do about them?
Perhaps most generally, precarity is what it means to have nothing to sell but your labour power, to use Marx’s turn of phrase. Taken in this sense, precarity is wide-spread: today, the bottom 40% of Canadians today own a measly 2% of national wealth and the bottom 60% own just over 10%. The fact of owning relative peanuts gives precarity an important part of its meaning – it’s certainly nicer to live in a rich country, but the “outside option” remains the wage with all its attendant risks.
The fight against precarity is also the foundation of the welfare state. The welfare state provides a social wage in addition to the working wage and thus undermines precarity. Its genesis was an experiment in social compromise. On the one hand, it gave workers greater security – a springboard to potentially fight for more. On the other, it gave elites a tool to manage labour unrest, especially the wave coming out of the late 19th and early 20th centuries, and the means to incorporate workers into new cycles of accumulation. For now, however, this experiment is sputtering. The last several decades have seen the breakdown of the compromise and, perhaps unsurprisingly, have brought precarity back to the fore, if for now in a more limited sense.
An argument along these lines is crystallized and developed in greater detail in a recent article by Kim Moody. It’s a rare piece because it takes seriously the empirical data that shows modest rises in what most people consider to be precarious work, while at the same time building a broader perspective on precarity that links the present with the past. His comments, while based on the UK experience, apply more generally across Northern economies and are worth quoting at length:
Are wages in Canada stagnant or growing? The short answer is another question: do you live in an oil boom province? There’s a fairly common meme that while Canada, like the US, saw wages stagnate, this is no longer true. Indeed, overall wage growth has picked up since the last crisis.
“Stagnant real wages” is yet another US talking point imported into Canada without checking the data pic.twitter.com/Z6fg2G4uMZ
The baggage that comes with this meme is that we here in reasonable, responsible Canada shouldn’t care about all those things that the US and European lefts are alarming about: no need to worry about inequality, austerity doesn’t concern us and so on. But while it’s a truism that we shouldn’t wholesale import analysis of another economy into the Canadian context, we are not immune to global trends. Yes, the US is a large economy with huge internal markets and this is a big difference; however, as a small, open economy, we cannot escape larger trends, especially with ever greater economic integration through free trade, freer movement of capital and international financialization.
One example of a phenomenon we haven’t really escaped is precisely wage stagnation. Here is a pair of charts showing wage growth since the end of the last recession in June 2009. They separate the three oil boom provinces (Alberta, Saskatchewan and Newfoundland and Labrador) from the rest of Canada. The first chart is from the survey of employers and shows the change in average real weekly wages . (It and all others are smoothed out to show the underlying trend, adjusted by provincial CPI and weighted by the size of the workforce in each province.)
I have a longer read in the newest issue of Briarpatch Magazine, which is dedicated to the world of work. If you don’t know Briarpatch, be sure to check out the other articles in this issue and consider subscribing; this is one of Canada’s oldest independent left publications and definitely worth supporting. My piece has the rather grand title “Robots, Migration and the Future of Work” but it’s really about trying to see how we are often pitted against one another and encouraged to see external threats, like machines and migrants, to our well-being rather than working together in solidarity against systemic causes.
The past several decades have not been kind to workers, as most of us know only too well. Those making minimum wage are making a penny more in real terms than they were in 1976, union membership continues to fall, and wage growth for most has been anemic – far outstripped by rising productivity. And this is to say nothing about how unfulfilling the jobs that swallow the waking hours of our lives can be. Yet when workers speak out, whether about our own crappy working conditions or the absurd enrichment of those at the top, we’re greeted by a familiar chorus that is often loudest inside our own heads: just be happy that you have a job at all.
For some, the implied culprit in the background of this story is the much poorer worker in the Global South, whether at a maquiladora in Mexico, a sprawling electronics factory in China, or a call centre in India. As Canadian workers have been integrated into a globalized economy, the story goes, they can be kept in check by what happens halfway across the world. Labour discipline isn’t just – or perhaps even mostly – a function of globalization, however. There are many domestic pressures keeping workers in line and the economy unkind.
The focus of today’s podcast is China: its development over the past several years, the situation of workers and unions as well as future directions. To get some perspective second largest economy in the world and one still expanding at breakneck, albeit slower, pace, I spoke with two guests: Minqi Li and Cathy Walker.
My first guest is Minqi Li. Minqi is professor of economics at the University of Utah and specializes in China’s economy and offers. He previously taught at York University in Toronto and received his PhD from University of Massachusetts, Amherst.
My second conversation is with Cathy Walker. Cathy was for many years a health and safety officer with the Canadian Autoworkers Union and is now retired. Both while still at CAW, and now during her retirement, she has participated in a number of exchanges with Chinese unions and is able to offer a unique perspective on trade unionism in both countries.
There’s lots of talk about “good jobs” these days. At the same time, the expectations for what makes work not only “good” but even a “job” keep falling. It’s hard to fight for better (and less) work in light of decades of defeat for workers as an organized force, years of lingering post-crisis fallout and constant reminders that neighbours, robots, migrants…everyone is coming for whatever job you may have left (I have an article about this last bit in the upcoming issue of Briarpatch).
In a world of part-timers, permatemps, temporary migrants, contractors, sub-contractors, Uber “partners”, Taskrabbits and many others unemployed, the good job means something different than it did several decades ago. The white and male world of the “Golden Age” job is not yet gone but continues to be aggressively dismantled. We should be wary of misplaced nostalgia for the past or magic policy bullets that elide transformations.
Despite this, struggles over how work is organized remain central to how social life is organized. So even as the engine of job crapification makes its way through the world of work, we should be ready to demand more when the conditions are ripe. Progress in making jobs worse has been accompanied by continued technological change that could be making work shorter, easier, better-rewarded at the very least – at best, building conditions to transform social relations.
These scribblings are occasioned by a request to submit a micro (100 to 200-word) proposal for a local conference on the topic of creating good jobs in British Columbia. In truth we need thousands of words to assess our weaknesses, our strengths, our tactics and our strategies; in short, how to organize. I cannot pretend to know concrete demands that energies can coalesce around, whether locally or broadly. Demands are born out of organization.
Here’s a familiar refrain: “Someone’s wages rose faster than someone else’s: report”. This depersonalized version sounds about as cynical as it should especially since the first someone is usually not a CEO whose wages are actually rising faster than everyone else’s – it’s that fat cat across the street, like you know, the garbage collector or maybe the admin assistant at your community centre. Or at least that’s who it is in this case as the headline actually reads, “Municipal employees’ wages rose twice as fast as provincial public sector: report.”
The report in question is one commissioned by the British Columbia government to put pressure on the wages of municipal workers, or even bring centralized bargaining to the still-autonomous municipal sector. The specific claims in the report as well as the shortcomings of its method have been thoroughly debunked by interested parties, both CUPE and the Union of BC Municipalities.
I want to use this as an example of something I seem to come across a lot lately… For beyond the wage comparisons, the economic indicator most prominently referenced in this report is the rate of inflation. More and more, it seems like any wage gain over and above the rate of inflation just isn’t fair. This is not a new argument and it is most easily applied to the public sector that has the stereotype of fat cattery stuck to it. Regardless whether it’s just me noticing it more, it turns out to be an odd one.
The basic problem is that this argument is out of line with the mainstream economic theory to which most of those making it ostensibly subscribe. That not-unfamiliar “go back to Econ 101” argument can be made here against those usually making it. In short, Under a whole array of conditions relating to the competitiveness of markets (perfectly so!) and the structure of production (very particular!), wages should be directly related to labour productivity.
Here’s a familiar trope: immigrants are industrious and hard-working. Here’s another, opposite trope: First Nations are idle and lazy. And here’s a graph that beautifully calls into question this neat pair of stereotypes.
It turns out that off-reserve First Nations workers and recent immigrants face the same unemployment rate – one that is much higher than that faced by workers born in Canada. As Angella MacEwen, who posted this graph, points out it highlights that “there are systemic barriers that need to be addressed” in the labour market.
On the one hand, there is a gaping disconnect between right-wing rhetoric that extolls immigrants and the actual struggles faced by new immigrants. Indeed, the irony is that the right’s discourse when confronted with reality brings out the systemic barriers rooted in racism better than the facts by themselves.
It’s relatively common knowledge that employer-run pensions have been scaled back over the past few decades. I’ve decided to dig some data on pensions for this post to see just how this has taken place in Canada, motivated by a just-released analysis of US pension reform that finds contradictions in how US workers have come to take on more and more of the risk for their retirement income.
First, a bit of background. There are two main kinds of employer-administered pension funds: defined benefit (DB) plans – where retirees receive a set monthly income, or defined benefit – and defined contribution (DC) plans – where retirees receive a variable monthly income dependent on how much they proportionately contributed to the pension plan and how this money was invested. There are also completely individualized retirement savings plans such as the RRSP, but these are essentially individuals investment accounts given preferential tax treatment. However, the link between RRSPs and DC plans is that they generally place investment risk on workers themselves; if whatever financial instrument the money is invested in suffers, retirement income also suffers.
While some employers have eliminated pensions altogether, many have restructured their pension plans. Here’s the Canadian data on registered pension plan membership, plotted as a percentage of employment:
Figure 1. Registered pension plan coverage as a percentage of employment by type of plan (Source: Statistics Canada, CANSIM 280-0008 and 282-0008).
By now, Thomas Piketty’s U-shaped graphs of wealth and income concentration are well known. What has received less attention are the differences between the last, early-20th-century inequality peak and today. One important difference is that the composition of wealth and income has changed: more of the income of the wealthy today comes from (ostensibly, at least) work.
Figure 1. Income going to the top 10% in the US over time followed by distribution of income between labour and capital income in the US, 1929 and 2007. (Sources: New Yorker and Capital in the Twenty-First Century, Figs. 8.9 and 8.10)
It seems not a month goes by without a new study highlighting that CEOs today are earning some enormous multiple of average worker pay. The latest figures put the pay of Canada’s top 100 CEOs at 171 times the average wage. Today’s top billionaires may be richer than Roman emperors but they are more likely to put in a 40-hour-or-more week. While Piketty is not the first to notice that the last few decades have witnessed a profound transformation in the upper class and the rise of “supermanagers”, he provides some of the best data on the exact shape of this enormous change.
The scope of the changes goes far beyond the relative weight of income sources. The rise of a numerically very small class of supermanagers at the top has had impacts on the perceptions and the culture of wealth and work throughout society – and it is this that remains less clear. We know who the supermanagers are, but we know a lot less about how we’ve all changed because of their rise. Certainly, their existence and social position reinforces the tendency towards an acceptance of meritocracy – no matter how much we diverge from it and despite mounting inequalities of resources that are incommensurable with inequalities of skill, education or creativity. The scope of changes, however, goes beyond merit and just desserts: a complex web of material and cultural changes mediated by changing institutions.
In the context of individual, cultural change, it is useful to bring up the work of psychologists like Paul Piff who have studied the effects of wealth on values, attitudes and behaviour. In short, study after study has found intense class-based differences across how people think and act – differences that, in general, do not reflect positively on the rich. One well-known finding is that the rich actually are relatively less charitable then those with low incomes. It is well-known that, generally, the poorer you are, the larger piece of your income you give to charity. Only the very wealthiest give a higher percentage of their income and this is largely aimed at things like “high” arts of which they are primary patrons or the funding of legacies and abetting reputations (named business schools and the like).
Figure 2. Charitable giving by income in the US (Source: Financial Samurai).
Such behaviour accords well with self-reinforcing meritocratic beliefs. Somewhat more cynically, it’s possible to note that the poorest may have been hoodwinked into confusing charity for justice – more charitably, perhaps we simply understand that we will not be getting justice anytime soon and so resort to the lousy second-best of charity, in particular when the welfare state is being slowly dismantled.
The studies carried out by psychologists go much further in cataloguing the social psychology of modern meritocracy. A notable example is a study that found how easy it is to attribute money-making luck to skill. Two players play a game of Monopoly that is rigged so that one player has to win (she gets more money at the start and on each passing of “Go!”). The roles are decided by a coin toss at the start. Perhaps less surprisingly, over the course of the game, the winning player usually became more self-assured engaged in overt displays of power. More tellingly, after the game, winners were likely to attribute their success to skill and (mental) effort rather than chance despite having been explained the rigged rules and witnessing the coin toss. The game was “managed” through skill and the success is testament to it.
Indeed, the old aristocratic value of noblesse oblige is today apparently less of a value the wealthier you are. Today’s wealthy are liable to think they worked their way to the top. On the one hand, this is really true. Not only are workers working longer on average (link to own blog), so are top managers. Economic data is useful in putting a different lens to these social psychology studies. Without the context of broader class dynamics like the rise of supermanagers, the studies can easily give way to moralizing. While they are often construed as morality tales about the value of being nice or the virtues of moderation, their real value lies in shedding light on how the changes in economic relationships are remaking who we are.
Put differently: while the language of precarity is useful, in some sense, workers have always precarious; the wealthiest have, however, not always been managers. The now popular story about vast patterns in distribution needs additional grounding. We need a history of “the making of the working capitalist” that will at once implicitly tell an important part of the story of the remaking of the working class in the neoliberal age.
